Friday, December 4, 2009

Hey Everyone Thinking that the New Unemployment Numbers are Good News... You're Doing It Wrong

Sorry for the obnoxiously long title.

Anyways, today I found myself having to listen to fellow students in my economics course discuss the newly released US unemployment numbers:

"Oh my God, conservatives are sooooooo dumb! The new unemployment numbers came out, and everything is getting better! Go team Obama!"

Needless to say, it took every ounce of strength I had to not walk out of the classroom.

Here are the facts:

Jobless claims DID fall from 462,000 to 457,000 this week. Hurray team Obama!

Emergency Unemployment Compensation claims went UP by 265,000 Americans. Wait... what?

The EUC was created in 2008 to give more unemployment compensation to those who had already exhausted all of the traditional compensation available. The EUC numbers are not included in the traditional numbers... something that allows the government to claim improvements, when really, a lot of people are just falling off of traditional unemployment and being added to another program...

The huge spike in the EUC basically says one thing: Americans are not finding jobs after extending periods of unemployment. Just because fewer Americans filed traditional jobless claims doesn't mean that the American job market is improving. Every business needs ATLEAST a few people to turn on the lights every morning and possibly a different set of people to turn off the lights every night. The true indicator of the robustness of the American job market is the rate at which unemployed people are able to find jobs. The spike in the EUC is showing us that this is not happening and the magnitude of the spike means that we are looking at more tough times ahead.

I wish everyone who is unemployed the best of luck.

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